Fredun Pharmaceuticals Receives 'Sell' Rating from MarketsMOJO, Stock Underperforms Market

Fredun Pharmaceuticals, a microcap pharmaceutical company, has recently received a 'Sell' rating from MarketsMOJO on 2024-08-19. This downgrade is due to the stock being in a Mildly Bearish range and its technical trend deteriorating from Sideways on 13-Aug-24. Since then, the stock has generated -1.36% returns. Multiple factors such as MACD, Bollinger Band, and KST have contributed to this bearish sentiment.
In the past year, Fredun Pharmaceuticals has significantly underperformed the market (BSE 500), which has generated returns of 37.46%. In contrast, the stock has generated negative returns of -21.26%. However, the company has shown healthy long-term growth with an annual net sales growth rate of 27.35% and operating profit growth rate of 43.06%.

The company also reported positive results in Jun 24, with PAT(Q) at Rs 4.13 cr growing at 72.1%, NET SALES(Q) at Rs 78.82 cr growing at 27.03%, and PBT LESS OI(Q) at Rs 5.52 cr growing at 35.29%. With a ROCE of 15.3, the company has an attractive valuation with a 2.5 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

It is worth noting that the majority of shareholders in Fredun Pharmaceuticals are non-institutional investors. Despite the recent downgrade, the company's profits have risen by 34.5% in the past year, resulting in a PEG ratio of 0.7. This suggests that the stock may have potential for future growth. However, it is important to consider the current bearish trend and the company's underperformance in the market before making any investment decisions.